{"id":8526,"date":"2025-11-20T11:23:22","date_gmt":"2025-11-20T14:23:22","guid":{"rendered":"https:\/\/www.abrazpe.org.br\/?p=8526"},"modified":"2025-11-20T11:23:24","modified_gmt":"2025-11-20T14:23:24","slug":"special-economic-zones-and-free-trade-zones-a-new-framework-for-investment-in-nicaragua","status":"publish","type":"post","link":"https:\/\/www.abrazpe.org.br\/index.php\/2025\/11\/20\/special-economic-zones-and-free-trade-zones-a-new-framework-for-investment-in-nicaragua\/","title":{"rendered":"Special Economic Zones and Free Trade Zones: a new framework for investment in Nicaragua"},"content":{"rendered":"

Tempo de leitura: 4 minutos<\/small><\/p> \n

<\/a>Carlos Taboada<\/strong> | With the recent publication in\u00a0La Gaceta<\/em>\u00a0No. 203 of Law No. 1264,\u00a0Law on Special Economic Zones of the Belt and Road<\/strong>, Nicaragua incorporates a new legal instrument aimed at strengthening its strategy to attract investment and diversify production. This regime, promoted as a platform to boost national economic development, offers domestic and foreign companies a set of tax, customs, and administrative incentives, complemented by a long-term vision focused on international cooperation and the country\u2019s competitiveness.<\/p>\n\n\n\n

I- Tax and customs scope of the SEZs<\/strong><\/p>\n\n\n\n

The law establishes a broad framework of exemptions for companies that set up in the Special Economic Zones (SEZs)<\/strong>. These include exemption from income tax, VAT, municipal taxes, and property transfer taxes, as well as exemption from customs duties on the importation of machinery, equipment, and supplies necessary for operations. These benefits are complemented by additional facilities: simplified procedures, a one-stop shop for services, availability of preferential infrastructure, training programs, and access to special energy rates.<\/p>\n\n\n\n

The Special Commission<\/strong> created by the law\u2014made up of representatives from ministries and strategic entities such as MIFIC, MHCP, BCN, MTI, the Attorney General\u2019s Office, and the National Free Trade Zone Commission\u2014will coordinate the implementation of the regime, to ensure legal certainty and operational efficiency.<\/p>\n\n\n\n

II- Interaction with the Free Trade Zone regime (Law No. 917)<\/strong><\/p>\n\n\n\n

This new framework naturally raises the question of its relationship with Law No. 917, the Free Trade Zone Law<\/strong>, which for years has been the main instrument for attracting export-oriented investment. This law\u2014which is in force and consolidated\u2014defines free trade zones as areas under special customs control, considered outside the national territory for tax purposes during their exemption periods.<\/p>\n\n\n\n

Both operating companies<\/strong> and users<\/strong> enjoy significant benefits: total exemption from income tax for the first ten or fifteen years, exemption from indirect and municipal taxes, and free importation of machinery, raw materials, and spare parts. However, the free trade zone regime is limited to predominantly export-oriented activities and is subject to strict regulation in terms of location, corporate purpose, and customs control.<\/p>\n\n\n\n

III- What do SEZs offer that is different?<\/strong><\/p>\n\n\n\n

SEZs expand the logic of promotion. Although they retain the objective of encouraging productive investment, they are not<\/strong> limited exclusively to the export sector. Their design allows for the incorporation of industrial, agro-industrial, logistical, technological, and value-added service<\/strong> activities, with a more flexible approach and more robust inter-institutional governance<\/strong>. They also introduce administrative mechanisms aimed at facilitating, streamlining, and coordinating public policies related to foreign direct investment.<\/p>\n\n\n\n

IV- Criteria for choosing between SEZs and Free Trade Zones<\/strong><\/p>\n\n\n\n

In practice, both regimes will coexist. The choice will depend on the nature of the project, its location, its productive orientation, and the type of benefit sought. Investors and business groups must carry out a comparative assessment<\/strong> considering, among other things, the following factors:<\/p>\n\n\n\n